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Monday, March 04, 2013

Eurocrats fear 'protest against entire system'

The game is up for eurozone countries Italy and Greece and a fatal blow to the
single currency may not be far behind. A deadlock of different sorts has arrived
in both countries and the political systems are locked into the impasse.

At the heart of the crisis are the austerity programmes
imposed on the population from the outside, by the infamous Troika – the
European Central Bank (ECB), European Union (EU) and the International Monetary
Fund (IMF).

Ordinary people in both Italy
and Greece
have had enough. And their resistance has had an impact, not in the sense that
austerity policies have been reversed – they haven’t – but in the inability of
the political system to deliver what the Troika demands.

Troika officials are in Athens this morning, combing through
the books and demanding more cuts before further tranches of the bail-out are
transferred to Greece (from where they leave instantaneously for a creditor
foreign bank or hedge fund).

Athens
agreed to cut 150,000 public sector jobs by 2015 in return for financial
support. Under that plan, 25,000
employees were to be transferred this year to a "mobility" scheme,
the first step towards redundancy.

With unemployment having reached a European record of 27%,
the coalition government fears enforced redundancies will lead to total unrest.
“The public sector has shrunk by 75,000 people in the last one and a half
years," the finance minister, Yannis Stournaras, said. "There will be
no layoffs."

With its GDP set to contract for a sixth straight year, unemployment
is forecast to be more than 30% by the end of this year. Over 60% of those
without work are under 25.

This cuts no ice with Troika monitors, with spokesman Thomas
Wieser declaring: "All that was agreed in the bailout plan has must be
implemented.”

Across the sea to the west, near neighbour Italy is
without a Pope, without a government and, from next month, will be without a
president when Giorgio Napolitano stands down. Napolitano was in Berlin over the weekend,
getting his marching orders from Chancellor Merkel, self-appointed guardian of
the euro.

The line from Germany
is that, whatever happens, the electorate must be kept away from the ballot box
any time soon following last week’s general election. That resulted in the
anti-establishment Five Star Movement founded by comedian Beppe Grillo picking
up 26% of the vote and 163 MPs. They met for the first time yesterday and the
only thing they agree on is not working with discredited political parties and
leaders.

With the formation of a government ruled out, Napolitano is
preparing to appoint another “technocratic” government of officials and
so-called experts. Yet this is the regime led by banker Mario Monti that the
Italian voters rejected overwhelmingly, with over 57% casting their ballots
against anti-austerity parties.

This time Bank of Italy governor Ignazio Visco is
front-runner to take over as premier.

This would be a slap in the face for ordinary Italians who
have seen the economy dive into depression, with output having fallen by 10% from
its peak, and where youth unemployment is at a staggering 37%.

What Napolitano is considering will effectively amount to a
coup in a country where a corrupt, bureaucratic state is considered the problem
by most people. “Nothing like this has ever happened before in the history of
the ItalianRepublic. We are seeing a true crisis of
the regime,” said Professor Luca Ricolfi from TurinUniversity.

Grillo dismissed the ploy and repeated his vow to “bring
down the old system” and added: “We’re not a political party, we’re a civic
revolution. This country is in ruins with two trillion in debts and we have to
rebuild it from scratch.”

In Brussels, the old order is
trembling at the prospect of Greece
being thrown out of the euro and Italy – if Grillo had its way –
deciding to quit the single currency. Giles Merritt from EU think-tank Friends
of Europe said Brussels
could handle old-style politicians like Silvia Berlusconi.

Grillo really worried them, he added, because it was a “protest
against the entire system, and they are afraid it is spreading to other
countries”. He’s not wrong there.

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